Announcer: From the
National Institutes of Health in Bethesda, Maryland, this is All About Grants.

Megan Columbus:
Welcome to another edition of All About Grants. I’m Megan Columbus, your host
from the NIH Office of Extramural Research. Today we’re here to talk about NIH funding
decisions, specifically what happens should your budget get cut. I have with me
today, Dr. Della Hann, Deputy Director of NIH’s Office of Extramural Research and
Rebecca Claycamp, Chief Grants Managements Officer at the National Institute on
Mental Health. I wonder if we could start with getting an idea of why budgets
are cut on incoming competing applications, those being new and renewal
applications that undergo peer review?

Rebecca Claycamp:
Well the first place an application might be recommended for a cut is at the
time of review. The review committee may make the conclusion that a particular
cost is excessive or not necessary, and they will actually make a
recommendation in the summary statement for a particular cost to be cut, for
example, maybe cut one postdoc from the grant. While this is uncommon, it does
occur, and we would follow through and remove that cost from actual the award
should an award be made.

Megan: I want to
point out that when we talk about the review groups looking at costs, they
actually do this after applications are scored based on scientific merit, so
budgets don’t impact scores at all. And so then the other point at which a
competing application could get cut is when it is being considered for funding
by the institute or center. What are the reasons that applications might get cut
at this point?

Della Hann: Well,
we have to always remember that when an institute decides to make a funding
decision they’re looking at the scientific merit of the application, they’re
looking at the priorities and mission of the institute, but the other thing,
the big thing, is they have to see how much money they have. Sometimes institutes
will make decisions based on their science that they will impose different
levels of cuts, if you will, at the time of the competing award. Sometimes it’s
used in order to be able to fund more science, essentially, to be able to pick
up additional projects without drastically hurting any given project. So there
will be decisions made at the time of award with regard to that, as well.

Rebecca: And in
situations where those cuts are significant enough to change the science, in
some cases perhaps they might even recommend cutting a specific aim. The whole application
scored well, but in the interest of containing the science and containing the
cost they may say, “Remove specific aim 3” and they would negotiate the cost
down appropriately.

Megan: Who would
the investigator be dealing with should that occur?

Rebecca: Well the
actual negotiation should generally be occurring budgetarily with the grants management
office, but the scientific negotiation will go on between the principal investigator,
the grantee institution and the program officer.

Della: Because as
Rebecca said earlier, in peer review they may not have made a recommendation
for reductions of budget, but they may also indicate in the review statement that
they were less enthusiastic about one particular aspect of the grant. And programmatically
as a program officer in reading that through, one could then have a negotiation
with the investigator to say, “Well there isn’t a great enthusiasm for this particular
piece of it. What if that were to be dropped?” In so doing, that would have
implications for budget. That could happen essentially as a consequence of the kinds
of scientific comments that are coming out through the review process, that
program could also have those kinds of negotiations.

Rebecca: Or even
in a situation where perhaps one of the specific aims really doesn’t align itself
as well with the institute’s mission. And in those cases, it underscores why it’s
so important for a principal investigator not only to make themselves aware of
the mission priorities of a given institute, but to have discussions with program
officers well in advance of submitting an application to make sure that their
science is aligned with the actual institute’s mission and priorities.

Megan: Should the
aims of the project be negotiated down, what kind of documentation would be
expected from the investigator or from the institution?

Rebecca: They
will have to submit revised specific aims to detail exactly what they’re agreeing
to reduce in terms of the science and then to accompany that a revised budget
that would match the actual work to be done.

Megan: So what
are the other reasons that budgets might be cut, that are more administrative
in nature?

Rebecca: Well the
more common reason that a budget is cut, outside of cost, is in the actual
review of a budget, and that is after an application is selected for payment
then the application budget is reviewed both by program and grants management.
Program helps grants management understand if certain costs are scientifically
appropriate. Then grants management will review the costs to determine their allowability,
allocability and their reasonableness. Reasonableness is the easy one, but the
other two usually provide confusion for people. Allowability is allowable both
according to the terms of the FOA, in other words, certain costs may be considered
unallowable for a particular funding opportunity, and it’s important for the PI
to read the FOA carefully to be sure to not include costs that are unallowable.
It’s also with regard to the cost principles where certain costs are allowable
or unallowable in keeping with cost principles. That’s why it’s very, very
important for a principal investigator to work both with their departmental administrator
and their institutional grants and contracts offices, preparing budgets early
so there’s time to review for issues of allowability, to make sure budgets are
appropriate. And then issues of allocability, whether or not a particular item
can be directly allocated to a particular budget. Let me give you an example of
something. So an investigator says I would like to put my journal subscriptions
in my grant budget. Generally speaking, that journal subscription cannot be
directly allocated to that specific research. It has a common benefit over all
the research, and in fact probably that investigator would be wanting to pay
for those journal subscriptions regardless of whether they have the grant or
not, so that generally is considered unallocable cost. And again, the institution,
the departmental administrator, the grants & contracts office can help the
investigator make those determinations.

Megan: So what
would you recommend if as a PI I get a cut that I’m not expecting or that I’m
not sure I can deal with? What would I do and, maybe more importantly, who would I call?

Rebecca: Let’s
say that you have a cut that you weren’t expecting, the amount seems wrong.
Calling your grant specialist to understand the nature of the cut. If certain
items were considered unallowable would you have that explanation? And sometimes
there are mistakes made where an amount was cut that should not have been cut
and those monies can be restored, but it’s very, very important that those
problems are identified at the time or very close to the time of the award. Because
the point where the grantee draws down the first dollars on those grants
they’re agreeing to the terms and conditions of the award, which also includes
saying “Yes, the budget is right.” So if there has been a mistake it’s good to
look over the very first notice of grant award is received and ask those
questions.

Della: I think
that really comes to play with cuts that are recommended by the peer review
process. Because if in your summary statement you see that there’s a
recommendation to have whatever cut from your budget for whatever reasons and
you strongly disagree with that, that it would really harm the nature of the
research that you’re trying to do, then having a discussion right at that very
moment with your program person. You would want to do that even before the
second tier of peer review (that is the council meetings meet) because that is
the place where the restoration would occur. There would be obviously you would
want to get your program person on board with all of that so that they can file
the proper paperwork with the council to see whether or not they also agree that
those funds could be restored. It’s a process that investigators really do need
to monitor, first of all how they’re putting together a budget, that they’re
talking with their own home institutions about what’s allowed, what’s not
allowed, how to build a good, sound budget, and then to be monitoring that in
addition to the science through the peer review process and working through
program officials. If you believe that there are inconsistencies.

Megan: As a
reminder to our listeners if you’re looking for your program official contact
or your grants management specialist you’ll be able to find those in your eRA
commons accounts.I’ve heard a lot of
good advice today, some of which is recurring, some of which is -- as you
prepare your budget read the application instructions, make sure you read the funding
opportunity announcements, make sure you talk to the program official, make
sure you understand the missions of the institutes. Is there any other parting
advice that you might want to provide?

Rebecca: Start
your budget early and give it time to ferment, as it were, because what
frequently happens is a person knows the main cost, but they haven’t included
all the costs. It’s after they’ve written the application that they remember
certain needs that they’re going to have. It’s really important for an application
budget to dovetail with the application. If something doesn’t seem to connect,
that’s a cost that’s frequently going to be eliminated if it’s not well
justified or isn’t seen as being integral to the actual research. And frequently,
budgets done in a hurry at the last minute are missing vital cost elements.
While one might think that, “Gee if I come in with a lower budget, maybe I’m
more likely to get funded.” That’s a sure way not to get funded. So you want to have a budget be appropriate for
the science.

Megan: And you
would not to get funded because, A, you haven’t asked for the money, and, B,
because the reviewers might think you don’t understand the scope of the
project?

Rebecca: Exactly
and you will see that in reviewer’s comments sometimes. That is their
conclusion. The PI does not understand what is needed to do the science.

Della: Very often,
I think, in working even myself when I was an investigator, I’m so caught up in
my science, and I’m very excited to be able to move that forward, the budget
pieces are something that I don’ t often think about. As Rebecca just said,
they happen at the last minute. And, I think, particularly for newer
investigators, building in those conversations earlier in the process in terms
of talking with more senior investigators as well as your institutional
officials who deal with budget can really be an ounce of prevention as one goes
forward.

Rebecca: The last
thing you want to do is estimate costs. It’s really so valuable to cost things
out. Again, that investigator doesn’t need to do that themselves. They generally
will have departmental administrators or institutional administrators who are
much more experienced at doing that to help them.

Megan: Thanks so
much for the great advice Rebecca, Della. For NIH and OER this is Megan
Columbus.